2018.08.0803:31:00UTC+00China Export Growth Tops Expectations In July

China's exports growth exceeded expectations in July, despite the U.S. imposing tariffs on $34 billion Chinese goods.

Data from the General Administration of Customs showed on Wednesday that exports advanced 12.2 percent year-on-year in July. This was faster than the 10 percent rise economists had forecast.

At the same time, imports logged a strong double-digit growth of 27.3 percent from a year ago versus the expected growth of 16.5 percent.

Due to higher imports, the trade surplus fell to $28 billion in July, which was below the expected $38.9 billion level.

Last week, Beijing unveiled a proposed list of $60 billion worth of U.S. goods that would face new tariffs after U.S. President Donald Trump threatened to raise tariffs on $200 billion Chinese goods.

Despite worsening trade relations with the U.S., China's surplus with the latter fell only slightly to $28.1 billion in July from June's record high. The US accounted for 19.3 percent of China's total exports.

Julian Evans-Pritchard, an economist at Capital Economics, expects export growth to cool in the coming months, though this will primarily reflect softer global growth rather than the U.S. tariffs, the direct impact of which will continue to be mostly offset by the renminbi's recent depreciation.

Meanwhile, import growth is likely to slow as domestic headwinds continue to weigh on economic activity, a trend that won't be reversed by the ongoing shift toward policy easing until at least early next year, the economist added.